IHH Healthcare Berhad, the second largest healthcare group in the world by market capitalisation, has decided to acquire 73.4 per cent in Global Hospitals for Rs 1,284 crore.
As part of the transaction, IHH will use Rs 265 crore to fund the hospital chain’s capex requirements and to optimise its current cost of borrowing.
Founded in 1999, Global Hospitals operates a chain of five hospitals, supported by three feeder centers, with approximately 1,100 operational beds in Hyderabad, Bengaluru, Chennai and Mumbai.
The number of operational beds is expected to ramp up to approximately 1,900 beds within the next five years, IHH said.
The acquisition will be done through IHH’s indirect wholly-owned subsidiary, Gleneagles Development (GDPL). To better leverage brand equity and coordinate branding efforts, IHH plans to consolidate all of Global Hospitals facilities under IHH’s Gleneagles brand, IHH said.
“This will be a game-changer for IHH in India. Together with our existing hospitals, the acquisition of Global Hospitals catapults us towards becoming one of the leading hospital groups in India,” IHH managing director and chief executive officer Tan See Leng said.
The acquisition augments and complements IHH’s position among the leaders in the quaternary care segment. IHH’s India portfolio comprises approximately 1,800 beds with potential to reach up to 4,000 beds in the next five years, Leng added.
“With its expanded presence in India, IHH aims to extract further business synergies, cost savings and operating leverage through centralised procurement, optimised backroom functions, common branding and marketing strategy, sharing of doctors and better utilisation of facilities,” Global Hospitals founder and chairman K Ravindranath said.